Global coverage
Employer of Record Luxembourg
Hire staff and expand your business in Luxembourg with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Luxembourg designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Luxembourg. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in Luxembourg takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in Luxembourg
A Brief Guide to Luxembourg
Luxembourg, a small European country, is renowned for its rich history, high standard of living, and diverse culture. It is a constitutional monarchy with a stable and prosperous economy. Luxembourg’s strategic location at the heart of Europe has made it an important player in European and international organizations, including the European Union, Schengen Area, and United Nations.
Category | Information |
Location | Western Europe |
Capital | Luxembourg City |
Official Language | Luxembourgish, French, German |
Area | 2,586 square kilometers |
Population | Approximately 634,000 |
Currency | Euro (EUR) |
Major Cities | Luxembourg City, Esch-sur-Alzette, Differdange, Dudelange |
GDP (2021) | $71.1 billion USD |
Major Industries | Finance, steel, chemicals, rubber, and glass |
Business Culture
Business Culture in Luxembourg
Business culture in Luxembourg values professionalism, politeness, and punctuality. Building trust and maintaining good relationships are essential in Luxembourg’s business community. Decision-making tends to be more consensus-driven, and meetings are well-organized and focused.
Business etiquette, such as exchanging business cards and addressing individuals by their titles, is customary. Success in Luxembourg’s business culture requires adaptability, respect, and a focus on relationship-building.
Payroll and Taxes
Payroll and Taxes in Luxembourg
There are no additional customary payments like 13th and 14th-month salaries.
Employee Taxation
In Luxembourg, employee income tax rates are progressive with 23 progressions between EUR 0 and EUR 200,004. The higher the income throughout the scales, the higher the tax rate that is applied. Below is a condensed down version of the rates.
Gross Annual Income | Tax Rate (%) |
Up to €11,265 | 0% |
€11,266 – €26,457 | 8-18% |
€26,458 – €45,897 | 20-38% |
€45,898 – €100,002 | 39% |
Over €100,003 | 40-42% |
Employer Taxation
Employers in Luxembourg are also responsible for various employer costs, which include:
Fund Type | Percentage |
Pension (up to a maximum of 11,284.77 EUR per month) | 8.00% |
Health Insurance up to a maximum of 11,284.77 EUR per month) | 2.80% to 3.05% |
Accident at Work up to a maximum of 11,284.77 EUR per month) | 0.68% to 1.13% |
Total Employment Cost | 12.22% to 15.30% |
Pension and Healthcare
Luxembourg Pensions
Luxembourg has a mandatory state pension system, funded by social security contributions from both employees and employers. The contribution rates, as a percentage of an employee’s gross salary, are as follows:
- Employees: 8%
- Employers: 8%
Healthcare in Luxembourg
Luxembourg’s public healthcare system, called the Caisse Nationale de Santé (CNS), provides comprehensive medical services to its residents, including primary care, specialist services, hospital care, prescription medications, dental care, maternity care, and mental health services. The CNS aims to ensure equal access to essential healthcare services for all residents, regardless of their financial status or geographical location.
Both employees and employers contribute to the system through a percentage of their salaries. This mandatory contribution is collected by the Luxembourg tax authorities and allocated to the healthcare system.
Employment Law
Employment Law in Luxembourg
Relevant Legislation:
Luxembourg employment law is governed by various pieces of legislation, including:
- Labour Code
- Social Security Code
- Law on the Organization of Working Time
- Law on the Protection of Pregnant Workers and New Mothers
- Law on Maternity and Parental Leave
Employment Contracts: Luxembourg employment contracts should be in writing and include essential information such as duration of employment, working hours, salary, and termination notice periods.
Working Hours: The standard maximum working time in Luxembourg is 40 hours per week or 8 hours per day. Overtime work is regulated, with compensation for extra hours.
Leave: Employees in Luxembourg are entitled to various types of leave, including paid annual leave (minimum of 25 working days per year), maternity leave, paternity leave, sick leave, and family care leave.
Overtime: In Luxembourg, overtime work is regulated by law and collective agreements. In general, Luxembourg law stipulates that overtime pay should be at least 1.4 times the regular hourly wage for the first eight hours of overtime work per week and 1.5 times the regular hourly wage for additional hours of overtime work.
Termination: Termination of employment in Luxembourg requires proper notice, which varies depending on the length of employment. Employers can terminate an employee’s contract if there is a just cause, such as poor performance, misconduct, or redundancy. Employers must provide a written explanation for the termination based on just cause. Unjustified termination can lead to claims for damages or reinstatement.
Notice: Both employers and employees must give a notice before terminating an employment contract. The notice period varies depending on the employee’s length of service. Generally, the notice period ranges from 15 days to three months.
Severance Pay:
Employees may be entitled to severance pay if they are terminated due to redundancy, restructuring, or other reasons that are not related to their performance or behavior. Severance pay is typically not provided in cases of termination due to misconduct, resignation, or the end of a fixed-term contract. The amount of severance pay an employee is entitled to often depends on their length of service with the employer. In Luxembourg, employees must have worked for a minimum of five years to qualify for severance pay, and the amount increases with the number of years of service.
IMMIGRATION
Work Permits in Luxembourg
The immigration process in Luxembourg is organized and systematic, similar to most countries worldwide. Prospective immigrants usually need to apply for a specific visa or residency permit that corresponds to their reasons for relocating, such as work, education, or joining family members.
Luxembourg offers several types of work permits for foreign nationals who wish to work in the country. The specific type of work permit required depends on the applicant’s qualifications, the nature of the job, and the intended duration of the stay. Some of the main types of work permits in Luxembourg include:
- EU Blue Card: This permit is designed for highly skilled non-EU nationals who have a valid job offer from a Luxembourg employer and must meet certain educational and professional requirements. The EU Blue Card allows the holder to work in Luxembourg and grants certain advantages regarding mobility within the EU.
- Salaried Worker Permit: This permit is issued for regular employment and is generally valid for up to one year, renewable as long as the employment contract is valid. Applicants must have a valid job offer from a Luxembourg employer.
- Temporary Worker Permit: This permit is issued for short-term employment and is generally valid for up to 12 months. Temporary work permits are typically granted for seasonal work, internships, or other temporary job opportunities.
- Family Reunification Work Permit: Foreign nationals who are married to or in a registered partnership with a Luxembourg citizen or a person with a permanent residence permit may be eligible for a work permit through family reunification. This permit allows the holder to work in Luxembourg without restrictions.
Citizens of European Union (EU) countries generally do not need a work permit to work in Luxembourg, as they benefit from the freedom of movement within the EU. However, they are required to register with the local Luxembourg authorities if they plan to work and stay in Luxembourg for more than three months.
Public Holidays
Luxembourg Public Holidays
Holiday Name | Date |
New Year’s Day | 1st January |
Good Friday | Varies |
Easter Monday | Varies |
Labour Day | 1st May |
Ascension Day | Varies |
Whit Monday | Varies |
National Day | 23rd June |
Assumption Day | 15th August |
All Saints’ Day | 1st November |
Christmas Day | 25th December |
St. Stephen’s Day | 26th December |
Wondering if expanding
in Luxembourg is right for you?
Read on or speak to a member of our team now
The Benefits
Luxembourg Employer of Record Benefits
When you choose Agility EOR to expand in Luxembourg, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in Luxembourg so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Luxembourg authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning Luxembourg payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.